Need for accountability

Just recently, Panay Electric Cooperative or PECO, which had the exclusive authority to distribute electricity in Iloilo City for a century until Congress refused to renew its franchise, suffered another legal beating.

The Iloilo City Regional Trial Court denied a motion for reconsideration filed by PECO against the court’s decision handed down last April ordering the sheriff to place More Electric and Power Corp. (More Power) in possession of PECO properties identified for expropriation.

It will be recalled that Congress issued a franchise to More Power, owned by businessman Enrique Razon, and allowing More to expropriate PECO’s electricity distribution assets.

PECO’s franchise expired on Jan. 19, 2019.

In dismissing PECO’s motion, RTC Branch 23 Judge Emerald Requina-Contreras noted that PECO no longer had a franchise to operate the distribution system and no certificate of public convenience and necessity (CPCN) to operate while MORE Power has both the franchise and the provisional CPCN.

For his part, Iloilo City Mayor Jerry Trenas last May 8 revoked PECO’s business permit after PECO lost both its congressional franchise and CPCN, issued by the Energy Regulatory Commission (ERC).

The properties allowed to be placed in More’s possession by the court were valued at around P240 million. These include various substations including land, machinery and buildings; as well as personal property directly used in electric distribution and servicing such as electric meters, poles, transformers, transmission, distribution equipment, service vehicles and other equipment; as well as other assets like the meter lab, power plant building, and switchboard house.

In the latest decision, Contreras said the court already issued and implemented the writ of possession according to law and jurisprudence.

When the writ of possession was issued by the Iloilo RTC, PECO went to the Court of Appeals for the third time for a TRO to stop the implementation of the writ of possession but the CA has not yet granted PECO’s request for a status quo ante order.

Unfortunately, PECO’s woes do not end here.

A year since losing its franchise, PECO and its owners are being made to account by the city’s consumers led by civic groups who claim that the electric cooperative spent the company’s money allegedly for the personal benefit of its owners and managers, to the detriment of consumers who had to pay one of the highest electricity rates in the country.

A local transport group also alleges that the utility firm diverted funds allotted for service vehicles that were supposed to be used for maintenance trips of its technical employees to check or repair faulty electricity distribution wires or equipment but was used instead to buy a luxury car for the company’s chief executive.

According to media reports, the Western Visayas Transport Cooperative and the Iloilo City Loop Alliance of Jeepney Operators and Drivers Association urged authorities to investigate documents showing that the head of the Cacho clan, which owns PECO, used company money for his personal luxury.

PECO and the Cachos claim, however, there was nothing wrong with acquiring the BMW sedan that PECO bought from funds the ERC had authorized to be spent for service vehicles. All expenditures of companies like PECO need approval by regulatory authorities because consumers pay for them through their monthly bills.

PECO is also under scrutiny after MORE Power started massive preventive maintenance work on Iloilo’s five electricity substations serving each of the city’s districts to prevent massive damage to the electricity distribution network that could result in a total shutdown of electricity service for the city’s almost 100,000 residential houses and businesses.

MORE Power claimed that it inherited a rotting, decrepit distribution system from PECO and thus was forced to cut electricity service to the city by 13 hours at the most to repair or upgrade equipment such as transformers and high-voltage wires in the substations.

But PECO claimed that the power outages were a result of mistakes made by MORE Power in the operation of the distribution system, and thus is a reason why it should be allowed to run the distribution business in Iloilo City again.

But of course it will be up for the ERC to find out who is telling the truth.

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